Venezuela
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Democratically elected governments have held sway since 1959. Hugo CHAVEZ, president since 1999, seeks to implement his "21st Century Socialism," which purports to alleviate social ills while at the same time attacking globalization and undermining regional stability. Current concerns include: a weakening of democratic institutions, political polarization, a politicized military, drug-related violence along the Colombian border, increasing internal drug consumption, overdependence on the petroleum industry with its price fluctuations, and irresponsible mining operations that are endangering the rain forest and indigenous peoples. Venezuela remains highly dependent on oil revenues, which account for roughly 90% of export earnings, more than 50% of the federal budget revenues, and around 30% of GDP. A nationwide strike between December 2002 and February 2003 had far-reaching economic consequences - real GDP declined by around 9% in 2002 and 8% in 2003 - but economic output since then has recovered strongly. Fueled by high oil prices, record government spending helped to boost GDP in 2006 by about 9% and in 2007 by about 8%. This spending, combined with recent minimum wage hikes and improved access to domestic credit, has created a consumption boom but has come at the cost of higher inflation-roughly 20 percent in 2007. Imports also have jumped significantly. Embolden by his December 2006 reelection, President Hugo CHAVEZ in 2007 nationalized firms in the petroleum, communications, and electricity sectors, which reduced foreign influence in the economy. Although voters in December 2007 rejected CHAVEZ's proposed constitutional changes, CHAVEZ still has significant control of the economy and has indicated he intends to continue to consolidate and centralize authority over the economy by implementing "21st Century Socialism." Source: The Places Factbook, CIA. |
Venezuela
was one of three countries that emerged from the collapse of Gran Colombia in
1830 (the others being Ecuador and New Granada, which became Colombia). For most
of the first half of the 20th century, Venezuela was ruled by generally
benevolent military strongmen, who promoted the oil industry and allowed for
some social reforms.